Motorsport Games Renews Non-exclusive BTCC Licensing For rFactor 2 BTCC Car Content

Earlier this month Motorsport Games entered into a settlement agreement with TOCA that resolved the old payment disputes from the previously cancelled licensing agreement. They paid $225,000 to resolve that, and also created a new non-exclusive licensing agreement for the rFactor 2 BTCC content that expires December 31, 2026. You can see the text of the fully quoted press release and also SEC filing information below.

This agreement doesn’t appear to relate in any way to the cancelled BTCC game and only, in my opinion, answers the open question I had back in November about the BTCC content in rFactor 2. While it’s certainly possible that Studio 397 could produce and release a standalone BTCC title in the same vein as Le Mans Ultimate, I see nothing to suggest that is a legitimate assumption at this time.

Press release:

MOTORSPORT GAMES AND BRITISH TOURING CAR CHAMPIONSHIP ANNOUNCE SETTLEMENT AND NEW LICENSING AGREEMENT

MIAMI, FL – April 17 2024 – Motorsport Games Inc. (NASDAQ: MSGM) (the “Company” or “Motorsport Games”), a leading racing game developer, publisher, and esports ecosystem provider of official motorsport racing series throughout the world, is pleased to announce the amicable resolution of its previous licensing dispute with the British Touring Car Championship (BTCC). Both parties have also signed a new non-exclusive license agreement, effective immediately, that reinstates BTCC content in the highly acclaimed rFactor 2 racing simulation until the end of 2026 – renewing the partnership and mutual commitment to deliver exceptional BTCC virtual racing experiences to fans worldwide.

Stephen Hood, CEO of Motorsport Games, expressed his enthusiasm regarding the recent agreement: “We are delighted to have reached an agreement with the British Touring Car Championship (BTCC), resolving our dispute while simultaneously establishing a new licensing agreement. This collaboration not only enables us to enhance our current offerings with BTCC content in rFactor 2 but also lays the foundations for an exciting future collaboration. I have long held the BTCC in high regard and introducing the first fully-fledged experience of this incredible racing series to sim racer’s homes through rFactor 2 was a standout moment. We anticipate a strong relationship with the BTCC in the years ahead.”

BTCC Chief Executive, Alan Gow, said: “The BTCC content within rFactor 2 was incredibly well received by our fans and the sim racing fraternity – so this new agreement provides for our BTCC content to continue to be updated and rolled out through to the end of 2026. I’ve no doubt this news will be very welcomed by sim racers everywhere.”

Current content included in rFactor 2 from the British Touring Car Championship comprises of eight cars, including fan favorites such as the BMW 330e M Sport and the Ford Focus as well as incredible British race tracks such as Brands Hatch, Donington Park and Thruxton.

For further information on rFactor 2 visit www.studio-397.com or the game’s social media channels @rFactor2. You can purchase rFactor 2 through the Steam store page and BTCC content in the game’s item store both from Steam and inside the game.

About Motorsport Games:

Motorsport Games, a Driven Lifestyle Group company, is a racing game developer, publisher and esports ecosystem provider of official motorsport racing series. Combining innovative and engaging video games with exciting esports competitions and content for racing fans and gamers, Motorsport Games strives to make racing games that are authentically close to reality. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series including the 24 Hours of Le Mans and the FIA World Endurance Championship, recently releasing Le Mans Ultimate in Early Access. Motorsport Games also owns the industry leading rFactor 2 and KartKraft simulation platforms. rFactor 2 also serves as the official sim racing platform of Formula E, while also powering F1 Arcade through a partnership with Kindred Concepts. Motorsport Games is also an award-winning esports partner of choice for the 24 Hours of Le Mans, creating the renowned Le Mans Virtual Series. Motorsport Games is building a virtual racing ecosystem where each product drives excitement, every esports event is an adventure, and every race inspires.

Text from the SEC filing:

I. On April 12, 2024, Motorsport Games Inc., a Delaware corporation (the “Company”), entered into a Settlement Agreement (the “Agreement”) with BARC (TOCA) LIMITED (“TOCA”). The Agreement resolved any and all disputes between the Company and TOCA with respect to the termination of the License agreement, dated May 29, 2020, between the Company and TOCA (the “Prior License Agreement”). As previously disclosed by the Company on its Current Report on Form 8-K filed on November 6, 2023, the Prior License Agreement was terminated effective as of November 3, 2023. Pursuant to the Agreement, the Company and TOCA, without admitting any liabilities, agreed that that the Prior License Agreement was terminated without any liabilities and that any and all royalties and/or any other sums whatsoever were forgiven by TOCA and discharged in their entirety in consideration of (i) the Company’s one-time payment of $225,000 to TOCA and (ii) the Company and TOCA entering, effective as of April 12, 2024, into a new License Agreement to use certain licensed intellectual property related to, themed as, or containing the British Touring Car Championship (the “New BTCC License Agreement).

II. On April 12, 2024, the Company and TOCA entered into the New BTCC License Agreement. Pursuant to the New BTCC License Agreement, TOCA granted the Company a non-exclusive license to use the “British Touring Car Championship,” “BTCC” and (insofar only as this is included in the title of the British Touring Car Championship) certain title sponsor logos, the title “British Touring Car Championship,” “BTCC” and other related intellectual property rights described in the New BTCC License Agreement (collectively, the Licensed IP”) for the official Licensed IP downloadable content purchased for the rFactor 2 video game digitally sold and distributed through the Steam store (including, but not limited to purchases through Licensee’s RaceControl storefront) (the “Products”), including the Products’ development, manufacturing, marketing, publicity, advertisement, promotion, distribution, publicizing, broadcasting, streaming, making available and/or selling worldwide, continued commercial exploitation of the Products, including the right to use, modify and improve the Products developed using the Licensed IP. As consideration for the license under the New BTCC License Agreement, the Company will be obligated to pay TOCA an annual royalty in the amount of 50% of Adjusted Gross Annual Sales (as defined in the New BTCC License Agreement) of official Company’s downloadable Products purchased for the rFactor 2 video game digitally sold and distributed through the Steam store during the term of the New BTCC License Agreement. The term of the New BTCC License Agreement expires on December 31, 2026. The New BTCC License Agreement further provides that, during the term of New BTCC License Agreement, the Company and TOCA agree to negotiate in good faith the options for the Company to develop an official British Touring Car Championship video game and one or more esports competitions based upon the British Touring Car Championship.

The above description of each of the Agreement and the New BTCC License Agreement and is intended as a summary only and is qualified in its entirety by the terms and conditions set forth therein. Copies of the Agreement and the New BTCC License Agreement are attached hereto as Exhibit 10.1 and 10.2, respectively, and are incorporated herein by this reference.